Posted by Teresa on September 21, 2010 under Landlord Tips, Tenant Screening & Background Checks | 
Sizing up tenants is a tricky business. Legally, a landlord cannot discriminate against potential tenants based on gender, age, race, family status, religion, disability or country of origin. And experienced landlords know that you can never judge a book by its cover. That flashy car and expensive jewelry doesn’t guarantee a tenant that will pay the rent on time. Conversely, a beater car and sloppy appearance might not be ideal, but if they can pay the rent, should we care about a wrinkled shirt?
While keeping an open mind during the tenant application process is a good idea, you still want to start the screening process with your very first contact.
Here are 4 warning signs that a potential tenant could cause you problems:
- Your potential tenant cannot pay the security deposit. If they want to pay in installments, or as soon as they get paid next week, or when they get their security deposit back on their current place, you might need to get used to hearing such excuses.
- They are a little too “salesy.” Excitement over finding a great apartment or rental house is great—you want your tenants to like your rental property. But major flattery of you, your outfit, your hairdo or the property should be a red flag. So is selling him or herself too hard. You could have a con artist on your hands!
- A potential tenant starts asking about trading services for rent. There are plenty of landlords who allow tenants to repair and maintain their building or cut the grass in exchange for rent. But it can lead to problems. If you’re not yet at the lease stage and you’re hearing offers of bartering for rent, consider yourself lucky and move on.
- The lease application is not filled out completely. Conveniently forgetting the phone numbers of a current landlord, boss, or personal references is a bad sign. Leaving blanks indicates that your potential tenant might not want you to have that information.
Follow up your gut-check on every tenant with a thorough background and credit screening. If all comes back clean, check with references and employers to give yourself a complete picture of your tenant—before the lease is signed!
Posted by Teresa on September 14, 2010 under Landlord Paperwork and Forms, Landlord Tips, Tenant Screening & Background Checks |
1. Not approaching your rental business like a business. To be successful, all businesses need to follow a plan. They need to be capitalized. And they need to be run professionally. This takes time, energy and money. Some landlords are not willing to invest all of these resources into their businesses. Some don’t have a plan. Some don’t have enough capital to keep their businesses going when rent income falls below projections (if they even have projections). Being unable or unwilling to do all of these things will almost guarantee a rental property business that is not as successful as it should be.
2. Conducting less-than-professional relationships with tenants. Landlords vulnerable to becoming too personal with tenants are often sucked into giving extensions on paying rent, reducing security deposit requirements or otherwise allowing tenants to ignore the established rules. Tenants who suffer no consequences will usually continue to bend or break the rules. It may seem harsh, but just as you can’t walk out of store without paying for a gallon of milk, a tenant should not be allowed to live for free in your rental property—even for a day.
3. Treating tenants differently. Letting certain tenants slide on the rent, steering certain tenants toward certain units, and otherwise showing deferential treatment to an individual or group of tenants can land you in trouble quickly. Landlords are constantly taken to court on charges of discrimination for actions like these. You don’t want to be one of them.
4. Failing to document. Keeping excellent records is a habit that can save your business. It’s vital to make copies of everything from driver’s licenses (if legal in your area), move-in/move-out inspections, applications, tenant screening authorizations and lease documents. But consider making notes of phone and text messages, emails and snail mail communications, too. Even a simple spreadsheet can prove to a judge that you treat all tenants equally and follow the law.
5. Not knowing when to call in the professionals. A licensed electrician and plumber, landscaper, lawyer, accountant, tenant screening service and possibly a property management company should be on every landlord’s list of resources. You may not need all of them all of the time, but you will likely need them at some point in running a rental property business. Trying to do it all has been the downfall of many a real estate investor. Knowing when help is needed in managing rentals can save your sanity—and maybe even some of your profit!
Posted by Teresa on September 10, 2010 under Landlord Tenant Lawsuits, Landlord Tips |
What is an landlord liable for? If a tenant falls on the sidewalk, is the landlord liable for damages? What about broken pipes? Read on for some general information about keeping yourself safe from liability as a landlord:
Safety
Landlords must provide a safe living space for their tenants. This means that if a faulty railing causes a child to fall from a landing, the landlord could be held liable. If there are large cracks in a sidewalk leading to an apartment building, the landlord can be held liable when a tenant’s guest trips and falls and injures him or herself. Or, if a rental house built prior to 1978 is being renovated, proper steps must be taken to protect occupants from lead paint poisoning. Landlords must also ensure smoke and CO2 alarms are installed and functioning. And plumbing systems must function properly—tenants could possibly sue for property damage from leaking pipes.
Security
Landlords who hire property managers must be as careful about them as they are with potential tenants. Landlords can be responsible for any criminal actions by their employees. Exposing your tenants to harm and yourself to possible charges of discrimination, unfair treatment or harassment is a real threat to your rental property business.
Criminal Activity
In most states, landlords must reasonably protect tenants from criminal acts. Proper lighting and adequate door and window locks are the landlord’s responsibility. If a flimsy lock allows an assailant into a tenant’s rental home or apartment, it is possible that the landlord would be held liable. Subjecting residents to another tenant’s criminal activity could become a landlord’s liability, too. That’s one reason why tenant screening is so important. If a tenant is harmed by a parolee, for example, the landlord could be held liable for allowing a known criminal to move in.
For expert advice on how to protect yourself as a landlord, check with an attorney specializing in landlord/tenant issues. Protect your business, your tenants, and yourself from liability by screening tenants and making your rental properties safe for residents!
Posted by Teresa on July 2, 2010 under Landlord and Tenant FAQs |
Margaret is a landlord who’s trying to do her best to make all of her tenants happy—in hopes that they’ll renew their leases and save her the time and effort of finding new tenants. But she’s discovering that keeping one group of tenants happy could be putting her in legal hot water.
Here’s what happened: Margaret owns a four-plex rental property, with a shared carport, individual patios, and a common back yard. There are no fences or dividers, and each tenant uses the back yard as they please. Two of her tenants have children, and two do not. All are on one-year leases.
The basic lease that all four tenants signed stipulates that children are allowed to play in the front and back yard areas of the building, and on sidewalks that lead up to the unit they live in. They are not to play in the carport.
Stacy is one of the tenants without children. She complained to Margaret that her neighbors’ kids were playing too close to her patio, and too loudly. She threatened to move at the end of her lease, which was coming up in 60 days. Stacy is an ideal tenant—never late with her rent, respecting Margaret’s time and appreciative of her efforts to keep the rental unit well-maintained. She rarely complained about anything.
Margaret wanted to appease Stacy. Besides, she agreed with her that it was unfair for the neighbors’ kids to play near her patio, disturbing Stacy’s peace and quiet. So Margaret sent letters to the two tenants with children, informing them that effective immediately, the children’s play area would be limited to their own front sidewalks and patios.
The result? The parents responded negatively, and threatened legal action against Margaret. And they had a legitimate point—their leases, clearly stipulating where the children could play, were still in place. Additionally, the lease only mentioned quiet hours from 10:00 p.m. to 7:00 a.m. So, Stacy’s noise complaint had no basis.
All of Margaret’s tenants signed the same lease. If Stacy had an issue with the rules about where kids could play, she should have dealt with it before she signed the lease. And if Margaret wants to change the rules for her long-term lease tenants, she can only do so at lease renewal time.
Landlords are also obligated to comply with the Fair Housing Act, which forbids discrimination against tenants due to familial status. So her rule about where children can and cannot play should apply to all tenants, not just children—just to be safe.
Posted by Teresa on June 28, 2010 under Landlord Tips |
Lots of landlords and property management companies require tenants to hold renter’s insurance. It’s a good idea for these reasons:
- Fewer hassles for landlords if disaster strikes
- Provides a layer of protection for the rental property owner
- Peace of mind that tenants are protected in case of fire or other accidental loss
- Often, only renter’s insurance covers a tenant’s dog
But what if a tenant’s policy is cancelled or allowed to lapse through non-payment of premiums. What about tenants who drop policies to save money—unbeknownst to you, the landlord?
Landlord Protection Begins with the Lease
When your lease is written properly, the tenant knows exactly what is required. Make certain that all tenants’ rental insurance policies name the property owner as an additional insured. Then, if the policy is cancelled by either the tenant or the insurance company, you should receive an alert.
Your lease should state the details for what is required of tenants and the consequences (including eviction) if they allow renter’s insurance policies to be cancelled or lapse. Certainly, you should expect gaps in tenant coverage when payments are late or forgotten. But as a landlord, you must be prepared to enforce the terms of the lease. What action does your lease require?
Be Consistent with Lease Requirements
When enforcing leases, it is most important that landlords and property managers are consistent. Allowing some tenants to slide on rental insurance coverage while evicting others for the same offense could lead to charges of discrimination. You don’t want to encourage any such accusations by uneven enforcement of your rules.
When requiring renter’s insurance in your rental property, treat it like any other lease requirement. When tenants break the lease, take your usual enforcement steps. Luckily, renter’s insurance is often available for low monthly payments—and after all, if a tenant can’t afford it, they might not be the ideal tenant for your rental property!
Posted by Teresa on June 22, 2010 under Landlord Paperwork and Forms, Landlord Tips, Tenant Credit Checks |
If you’re a landlord who is not using written rental applications 100% of the time, here are 5 reasons why you should!
- The practice makes everyone more comfortable. Perhaps there was a time when a handshake and a handful of cash were all landlords needed to start a lease. But in this era of liability, lawsuits, and legal obligations, proper paperwork is just a must. And tenants expect to fill out some form of application, too. It puts them at ease that you’re a legitimate business person who will handle the landlord/tenant relationship professionally.
- It can protect you from liability. Requiring a rental application from each prospective tenant over age 18, as well as the names of all children who will reside in your rental housing, could reduce your liability for accidents or injuries that occur on the rental property. When your rental application clearly states municipal code limits on number of residents, fire code regulations, and emergency contacts for each tenant, you are more protected in cases of emergency.
- It can protect your rental business from a discrimination lawsuit. Collecting the same information from every prospective tenant, then using the same criteria to choose each tenant, ensures that you are within the guidelines for discrimination laws. If you just talk to prospective tenants, and choose one based on whoever is most able to pay the rent, you could be setting yourself up for a lawsuit. A lawyer for a rejected applicant might have a great case, since you’d have no documentation as to why you chose a particular tenant. When you have paperwork like applications and credit reports to back up your decision, you’re covered.
- You can gather the information you need to perform a thorough tenant screening. Rental applications should contain name, address, previous addresses, employment information, social security numbers, driver’s license numbers, and all contact information. They should also contain a signature page authorizing you to pull tenant credit reports and tenant criminal background screening reports.
- You get a commitment from a prospective tenant. When landlords show apartments and rental houses, they too often let a great prospect get away. Presenting the prospective tenant with an application form and request for security deposit to “hold” the rental unit is a good way to get a commitment. Then, you can do a tenant screening to confirm he or she meets your criteria before signing a lease or rental agreement.
Legal disclaimer:
The contents of this article are intended for general information purposes only, and should not be relied upon as a substitute for obtaining legal advice applicable to your situation.
Posted by Teresa on March 19, 2010 under Landlord Tips |
Like most articles about secrets, you’ll find that the ones we’re about to share with you are mostly common sense reminders—but every one needs easy-to-remember hints now and then.
Landlording is about people, as well as the buildings they live in. If you’re a landlord, you probably spend much more time dealing with people than you do with the rental houses or apartment building you own. Successful leaders and managers of people have some common traits—and so do successful landlords.
The first is that they listen more than they talk. Your tenants want to be heard and understood. You can hear someone if you’re doing more talking than they are. The best tgift ou can give someone is to make them feel like they’re the only person in the world. You can do that by making eye contact and really focusing on your tenant and what they are saying. Indicate you’re listening and ask clarifying questions if they say something you do not understand. Repeat back to them what you just heard.
Successful landlords are strong and sometimes even stern. The word “no” is an important part of every landlord’s vocabulary. Making sure that all your tenants are treated fairly means saying “no” to certain requests. Being a pushover may make the current situation more tolerable, but it can lead to undermining your authority.
That doesn’t mean that successful landlords aren’t flexible. In fact, being willing to change a policy or admit you are wrong is vital to maintaining good relationships with your tenants. For example, more landlords are allowing pets than ever before; this helps fill vacancies and keeps animal-loving tenants happy.
Finally, successful landlords are some of the most patient people we know. This is no business for hotheads or those who are unwilling or unable to negotiate, renegotiate, and count to 10—or 100—several times every day. Watching what you say, taking a deep breath when a tenant is upset, and exercising patience in every situation will go a very long way to your success as a landlord. Remember, not everything is an emergency and, not every tenant is trying to get something over on you.
Listening, showing respect to people from all backgrounds, being patient and saying “no” are all common-sense attributes to successful rental property management.
Posted by Teresa on January 30, 2010 under Landlord and Tenant FAQs, Landlord Tips |
Landlording can be a tough business. Your income often depends on factors beyond your control: the economy leads to job losses; job losses and overbuilding lead to vacancies; vacancies lead to a renter’s market. Coupled with the day-to-day hassles of keeping your properties in shape, handling tenant problems, and making the numbers work, the stress can make even a saintly person cranky at times.
Cranky landlords don’t necessarily make the best landlords. Most landlords want to be known as a “good landlord,” which could be broadly defined as enjoying mutually-beneficial and respectful relationships with long-term tenants, making a profit and enjoying the rental business. These are not unachievable goals.
Good landlords know that income property investing is not about the buildings. They know their income from those properties depends on the people inside them. Good landlords know they are in the people business. Outstanding customer service and communication skills are absolutely necessary to be a good landlord.
Tenants might say the characteristic common to good landlords is empathy—the ability to understand another’s situation, feelings, or emotions; to walk a mile in that person’s shoes.
Tenants are people and want to be treated just like you want to be treated. Sure, they make mistakes. Sure, you’ve heard the horror stories from other landlords about skipped rents, trashed apartments, neglect, and bad behavior. These things happen to the nicest of landlords. But they don’t happen as much to good landlords who treat their business like a business, their tenants like people, and who set high standards for their properties, their tenants, and their own behavior.
Good landlords:
are fair
know who they are renting to before the lease is signed
make repairs when they are needed
wouldn’t rent anyone a property they wouldn’t let their mother live in
set firm rules
respect their tenants enough to not treat them like children—or animals
do not take advantage of their tenants
are not self-serving
recognize the landlord/tenant relationship as a mutually-beneficial business partnership that takes work on both sides
It doesn’t take a superhero to make a living in the rental property business. Lots of folks do—and some manage to be “good landlords,” too!
Landlording can be a tough business. Your income often depends on factors beyond your control: the economy leads to job losses; job losses and overbuilding lead to vacancies; vacancies lead to a renter’s market. Coupled with the day-to-day hassles of keeping your properties in shape, handling tenant problems, and making the numbers work, the stress can make even a saintly person cranky at times.
Cranky landlords don’t necessarily make the best landlords. Most landlords want to be known as a “good landlord,” which could be broadly defined as enjoying mutually-beneficial and respectful relationships with long-term tenants, making a profit and enjoying the rental business. These are not unachievable goals.
Good landlords know that income property investing is not about the buildings. They know their income from those properties depends on the people inside them. Good landlords know they are in the people business. Outstanding customer service and communication skills are absolutely necessary to be a good landlord.
Tenants might say the characteristic common to good landlords is empathy—the ability to understand another’s situation, feelings, or emotions; to walk a mile in that person’s shoes.
Tenants are people and want to be treated just like you want to be treated. Sure, they make mistakes. Sure, you’ve heard the horror stories from other landlords about skipped rents, trashed apartments, neglect, and bad behavior. These things happen to the nicest of landlords. But they don’t happen as much to good landlords who treat their business like a business, their tenants like people, and who set high standards for their properties, their tenants, and their own behavior.
Good landlords:
are fair
know who they are renting to before the lease is signed (thorough tenant pre-screening)
make repairs when they are needed
wouldn’t rent anyone a property they wouldn’t let their mother live in
set firm rules
respect their tenants enough to not treat them like children—or animals
do not take advantage of their tenants
are not self-serving
recognize the landlord/tenant relationship as a mutually-beneficial business partnership that requires effort on both sides
It doesn’t take a superhero to make a living in the rental property business. Lots of folks do—and some manage to be “good landlords,” too!
Pre-screen all tenants as part of your standard application process. Background and credit checks will help ensure you rent to qualified tenants. For more landlord resources, including forms and information on tenant screening, turn to E-Renter.com. .
